Per capita debt declines to $146.80

The per capita external debt burden had declined to US$ 146.80 in 2009-10 fiscal from $ 151.21 the previous year, reports UNB. The debt burden of $ 6.59 in 1973-74 rose to $ 136.92 in the 2003-04 fiscal, according to official statistics. Talking to the news agency, an Economic Relations Division (ERD) official said that with the decline of share of grant in the external aid package in recent years, the volume of external borrowings had increased substantially every year. This has resulted in an increasing trend of per capita debt burden. The rapid rise in borrowings from abroad and unfavourable currency exchange rates have also raised the per capita debt liabilities of the country by about $2.3 a year on an average, over the last six to seven years. According to ERD sources, Bangladesh's external debt obligation comprises mainly public sector debt. The share of private sector borrowings is negligible. It is less than 4 per cent of the total external debt. The total public sector external debt has increased to $ 21.45 billion in 2009-10 up from $ 973.80 million in 1974-75. Though the external debt obligation in the total aid package of Bangladesh has increased over the years, it is still within manageable limit as compared to many other developing countries. However, the increasing external debt, together with expiry of grace periods and unfavourable exchange rates are triggering increased external debt service liability. The aid package, covering both grants and loans, contributed to the development of the economy, but is also leading to growing external indebtedness. Since independence up to June 30, 2010 apportionment of grants has been almost equal to loans, accounting for almost 43.60 per cent of the total amount.